3D Systems Corporation (DDD) Stock Surge Due To Short Covering: Piper Jaffray

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Piper Jaffray has raised its price target on 3D Systems stock to $10.50

3D Systems Corporation (NYSE:DDD) stock surged by more than 19% in trading today after the company reported its earnings results for the  second quarter of the current fiscal year. For the three months ended on June 30, 3D Systems earned a profit of 12 cents per share on revenue of $158.1 million compared to consensus estimates of 6 cents per share and $161 million respectively.

Investment firm Piper Jaffray, in an updated research note sent out to clients and investors today, weighed in on the matter. Analysts at the firm highlight that a tight discipline in expenses with significant cost cutting measures enables 3D Systems to report better than expected earnings. These analysts however, at the same time point out that 3D Systems’ topline still came in below consensus estimates. Total sales during the quarter fell by 30% on a year over year basis during the quarter.

The firm attributes the bullish run the company’s stock witnessed following the earnings call on several investors covering their short positions. Analysts at the firm are of the opinion that shares of the 3D printer manufacturer are overvalued and are exposed to great risk. The firm believes that 3D Systems top line would come under great pressure from increasing competition with the entry of HP and Carbon 3D in the space. Piper Jaffray currently has an Underweight rating on 3D Systems stock. The firm however has bumped its price target to $10.5 on the company.

3D Systems management expressed great contentment over the company’s earnings results. CEO Vyomesh Joshi said that he was especially ‘pleased’ with the positive response seen for the company’s healthcare solutions. We see clear opportunities for improvements in 3D printers and on demand manufacturing services as we drive operational excellence and focus on providing reliable end-to-end solutions. Mr. Joshi added that the company is in the midst of executing a detailed strategy to provide consumers with advanced solutions.

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